Santander Bank loses 2,204 million euros in one month

In the event of a hard Brexit, as proposed by British Prime Minister Boris Johnson, Santander Bank will be one of the largest Spanish companies most affected. This is being demonstrated in these days of uncertainty, since, in the last month, the Cantabrian entity has lost 2,204 million euros of stock market value in London.

This phenomenon is caused, on the one hand, by the loss of the value of the share, which went from 340.35 pounds on August 5 to 311.75 with which the session closed on September 2. On the other hand, when quoting in a currency other than the euro, Santander has been affected by the devaluation of the British currency caused by the uncertainty that Johnson could execute a hard Brexit on October 31.

According to the information found on the website of the bank chaired by Ana Patricia Botín, Santander has a total of 75,398,989 shares in the London stock exchange. Therefore, on August 5, the value of the Cantabrian entity was 25,662 million pounds. That day the change with respect to the euro was 0.9142, so the value in the Eurozone currency was 23.460.24 million euros.

However, the session of September 2 closed with a Santander value of 311.75, which gave a total of 23.505.63 million pounds sterling. That day the change to euros of the British currency was 0.9043. Therefore, the stock market value of the bank chaired by Ana Patricia Botín on the London stock exchange is 21,256.14 million euros.

Consequently, the uncertainty caused by Boris Johnson in reference to the implementation of a hard Brexit leaves a clear victim with respect to Spanish companies: Santander has lost a total of 2,204 million euros in less than a month.

The exposure of the bank chaired by Ana Patricia Botín to foreign markets caused the International Monetary Fund (IMF) to classify Santander as a high-risk entity. A report published in 2017 stated that the Cantabrian entity had “more than half of its assets abroad and depends largely on the profits of its international operations. The great confidence in foreign subsidiaries in the generation of profits could imply significant vulnerabilities if the financial conditions in the host countries deteriorate ». The IMF made it clear: exposure to foreign economic movements makes Santander a real danger to the global financial system.

These risks are also increased by exposure to the behavior of the currencies of those countries in which Santander has a presence. In the results of 2017 we could already see how the entity chaired by Ana Patricia Botín absorbed a negative impact of more than 8,000 million euros in its assets – as detailed on page 25 of the Annual Report for that year -, due to the evolution of the currencies in the countries in which it operates.

Therefore, Brexit is once again put on the table as one of the reasons why Santander will carry out operations that attempt to mitigate the possible losses that it would suffer with the United Kingdom's departure from the European Union, operations such as that of the Popular Bank or the which is beginning to be implemented in Mexico.

However, will the large shareholders bear the losses that Santander is suffering, not only in the United Kingdom but also in Spain? Will they continue to impose the will of the Botín family, which barely controls 1% of the bank, when curbing strategies that would benefit the entity but that could harm its president as happened with the Orcel case? The shareholders, mainly minorities, customers and employees attend with concern to the evolution of Santander and, above all, due to the apparent inactivity of the Board of Directors in the face of a situation that could be very worrying in the future, perhaps not far away. A minority shareholder has told Diario16 that “there are many who are concerned about the evolution of the value of the share. At the General Meeting in July, a 92-year-old shareholder told Ana Patricia Botín that if things were going so well that why the action was so low. Exactly he said "Ana answer me, if everything goes so well why the action is so low", and started the applause of all present. The shareholders are very worried ».